Tag: consumers

Consumer sentiment dropped to its lowest level since before the U.S. presidential election in 2016 amid growing concerns over U.S. economic growth, according to data released Friday. The University of Michigan consumer sentiment index fell to 90.7 this month — its lowest since October 2016 — from 98.3 in December, preliminary data showed. Economists polled by Refinitiv expected the index to fall to 96.4. “Aside from the direct economic impact from these various issues on the economy, the indirec

Consumer sentiment dropped to its lowest level since before the U.S. presidential election in 2016 amid growing concerns over U.S. economic growth, according to data released Friday.

The University of Michigan consumer sentiment index fell to 90.7 this month — its lowest since October 2016 — from 98.3 in December, preliminary data showed. Economists polled by Refinitiv expected the index to fall to 96.4.

“The loss was due to a host of issues including the partial government shutdown, the impact of tariffs, instabilities in financial markets, the global slowdown, and the lack of clarity about monetary policies,” said Richard Curtin, chief economist for the Surveys of Consumers. “Aside from the direct economic impact from these various issues on the economy, the indirect effect meant that half of all consumers believed that these events would have a negative impact on Trump’s ability to focus on economic growth.”

Curtin also said the survey showed the year-ahead economic outlook was the worst since mid-2014.

Microsoft is working on a new bundle of software for consumers, following the launch of its Microsoft 365 package for workers. CEO Satya Nadella hinted at it in a meeting with journalists at company headquarters on Monday. Microsoft introduced Microsoft 365 in mid-2017. Microsoft carefully tracks the number of devices running Windows 10, as well as the number of people who subscribe to Office 365. It’s conceivable that one or both of those could be part of Microsoft 365 aimed at non-business use

Microsoft is working on a new bundle of software for consumers, following the launch of its Microsoft 365 package for workers. CEO Satya Nadella hinted at it in a meeting with journalists at company headquarters on Monday.

The remark appears in the context of Nadella’s response to a question about what Microsoft will do in the near future to serve consumers. Nadella’s Microsoft has reduced focus on things like Windows for smartphones and doubled down on, among other things, selling Office subscriptions and renting out the Azure public cloud to meet businesses’ computing needs.

But at the Monday event, Nadella made it clear that it still very much cares about consumers. And a new software package is part of that.

“It’s very fair to say, as I said in the very beginning, that we started after all on the consumer side and then over-indexed to the IT side, and we definitely are very focused on bringing that back,” Nadella said, according a transcript of the event circulated by Ben Thompson’s Stratechery newsletter.

Nadella pointed to Microsoft’s collection of Surface devices as an example.

“Surface is doing well because ultimately people do have a special connection with the device they use,” Nadella said. In the most recent fiscal year, Microsoft’s Surface revenue totaled $4.7 billion, representing about 4 percent of total revenue.

Microsoft also has an advertising business, which addresses consumers, partly in the Bing search engine.

“We have all kinds of strategic flexibility to do things that would perhaps be more amenable to both the end users as well as the advertisers and publishers, so we expect to do things even in that space,” Nadella said.

The CEO also hinted at the potential of a Microsoft 365 collection of products for consumers, although he stopped short of saying what it might include, when it will become available and how much people will have to pay for it. (Microsoft didn’t respond to a request for comment about that.) The comments came a month after ZDNet reported on plans along these lines.

“So I would say Surface is a brand, what we are doing with Office 365 or what we will soon be talking about as Microsoft 365 consumer subscriptions, those would be again completely consumer businesses,” Nadella said.

Microsoft introduced Microsoft 365 in mid-2017. It’s a way to give employees Windows 10, the Office 365 portfolio of subscription-based productivity applications, and Enterprise Mobility + Security, a grouping that comes with identity and device management tools. Earlier this week Microsoft announced a deal with Walgreens Boots Alliance that will bring this software collection to some 380,000 employees.

Microsoft carefully tracks the number of devices running Windows 10, as well as the number of people who subscribe to Office 365. It’s conceivable that one or both of those could be part of Microsoft 365 aimed at non-business use.

Another part of the package could potentially be gaming, given that Nadella also spent some time on Monday talking about that subject. The company has a subscription business called Game Pass and is readying a service for streaming games from the cloud.

“We have a structural position in that we have both a console business as well as a PC business which happens to be in fact bigger than the console business when it comes to gaming, and the idea is to aggregate those sockets with a subscription service,” Nadella said. “We won’t be the only ones, there will be competition just like with other content, there may be a few subscriptions that will be successful, so we are going to go after it.”

Even as Netflix hikes prices, many people have no idea how much they already pay for the subscription service — or seem to care all that much. On Tuesday, the video streaming and content creation company announced its biggest increase since beginning its streaming service 12 years ago. About 84 percent of consumers in a survey underestimated what they shell out on their subscription services, like Netflix, Spotify and Amazon Prime, according to a report by the Waterstone Management Group, a Chic

Even as Netflix hikes prices, many people have no idea how much they already pay for the subscription service — or seem to care all that much.

On Tuesday, the video streaming and content creation company announced its biggest increase since beginning its streaming service 12 years ago. The price boost takes effect immediately.

About 84 percent of consumers in a survey underestimated what they shell out on their subscription services, like Netflix, Spotify and Amazon Prime, according to a report by the Waterstone Management Group, a Chicago-based consulting firm.

On average, consumers already spend more than twice as much as they think they do on those monthly expenses, which includes dating apps, cable television and Wi-Fi: Consumers estimated they spend $111 a month on such services when they actually average $237, Waterstone found in its survey of 2,500 people last year.

And regardless of the price tag, consumers were “happily hooked” on many of their subscriptions, particularly Netflix and Amazon Prime (which had previously raised the price to $119 a year), cable TV and music streaming services, such as Spotify, the report said.

In fact, Netflix’s previous rate increases have had little effect on subscribers, and have traditionally buoyed the stock.

At the same time, families have less slack in their budgets than before, according to research by The Pew Charitable Trusts. Household spending has risen 25 percent or more in the past two decades, even adjusting for inflation, yet incomes have not kept pace, the study said.

In addition, one-quarter of Americans, or roughly 55 million people, have nothing saved in an emergency fund, according to a separate report by Bankrate.com.

Part of that swelling demand stemmed from new anti-fraud regulations that took effect last year, delaying refunds until mid-February for consumers claiming the earned income tax credit or the additional child tax credit. The IRS said last week that income-tax filing season would begin on Jan. 28 as planned, and that it would pay refunds to consumers in spite of the shutdown. But tax pros have expressed doubts that the season will go off without a hitch. More from Personal FinanceIRS confirms tax

Part of that swelling demand stemmed from new anti-fraud regulations that took effect last year, delaying refunds until mid-February for consumers claiming the earned income tax credit or the additional child tax credit.

This year, experts say, the ongoing government shutdown could generate even more interest, both from affected workers who are running low on financial resources, as well as other taxpayers who worry about refund delays tied to the shutdown and implementation of the new tax rules.

The IRS said last week that income-tax filing season would begin on Jan. 28 as planned, and that it would pay refunds to consumers in spite of the shutdown. But tax pros have expressed doubts that the season will go off without a hitch.

Do-it-yourself online filers may need to ask for some help this tax season

The shutdown won’t give you any reprieve from this Jan. 15 tax deadline

Consumer advocates generally don’t like refund-advance products, due to both high costs and the potential for scams. And because the IRS often issues refunds quickly (by its own estimations, in less than 21 days), it’s usually a better idea to steer clear, said Bruce McClary, a spokesman for the National Foundation for Credit Counseling.

“The situation is complicated this year because of the government shutdown,” he said. “It does put a fly in the ointment of all the advice we’ve given in the past to just sit tight instead of taking an advance.”

“There are a lot of people living on the edge right now,” McClary said — and for many of those consumers, a tax refund is a substantial check.

Apple’s latest iPhone models are facing huge discounts in China as retailers try to sell the struggling devices. That comes as the top-of-the-line Apple smartphones have posted poor China sales on what experts say are too-high prices for the world’s largest smartphone market and a lack of innovative features compared to local competitors like Huawei. Other third-party sellers on the site had the devices for even cheaper, offering flash sales to try to unload iPhones. Sunion, an Apple re-seller,

That comes as the top-of-the-line Apple smartphones have posted poor China sales on what experts say are too-high prices for the world’s largest smartphone market and a lack of innovative features compared to local competitors like Huawei. The technology giant itself acknowledged earlier this month that unexpectedly low sales in the Chinese market would likely lead to worse-than-anticipated first quarter revenues.

One of the most recent iPhone cost cuts in the country came from Suning, a large Chinese retailer, which changed the price of the 128GB version of the iPhone XR from 6,999 yuan ($1,036) to 5,799 yuan ($858) — a 1,200 yuan ($178) discount.

Other third-party sellers on the site had the devices for even cheaper, offering flash sales to try to unload iPhones. One seller had a 256GB version of the iPhone XS Max, Apple’s most premium device, for 9,699 yuan ($1,436), way below the U.S. firm’s official selling price of 10,999 yuan ($1,628) for that smartphone.

Still, that remains more expensive than in the U.S., where the same phone would sell for $1,249, according to the Apple website.

And that’s just on one site. Other retailers in China are also putting their iPhones on sale. Sunion, an Apple re-seller, was advertising 700 yuan off for both the 128GB and 256GB versions of the iPhone XR. E-commerce site Pinduoduo, which allows third-parties to sell products, also had hefty discounts across all of the latest iPhone models.

Apple’s issues in China are down to two major factors, experts and local consumers say: It got its pricing wrong, and it has failed to introduce features to excite consumers in a forward-thinking technology market. Now, analysts said, competitors have taken market share in the premium smartphone space.

Chinese consumers are starting to “take sides” as the U.S.-China trade dispute rages on, and that could hamper the success of some U.S. companies, CNBC’s Jim Cramer said Friday. Then, earlier on Friday, Goldman Sachs downgraded the stock of Starbucks, citing “a number of points of caution” in the Chinese market. “We know that the Chinese consumer’s beginning to take sides,” Cramer said on “Mad Money.” But the best ways to gauge trade talk progress in Cramer’s book are what he called “the three A

Chinese consumers are starting to “take sides” as the U.S.-China trade dispute rages on, and that could hamper the success of some U.S. companies, CNBC’s Jim Cramer said Friday.

Perhaps it already is: U.S. tech giant Apple recently warned that its fiscal first-quarter results would miss expectations due to weaker-than-anticipated iPhone sales in China. Then, earlier on Friday, Goldman Sachs downgraded the stock of Starbucks, citing “a number of points of caution” in the Chinese market.

“We know that the Chinese consumer’s beginning to take sides,” Cramer said on “Mad Money.” “That’s not good news for any American companies that do business over there, even if many of their stocks seem to reflect that we might be getting some progress in the trade talks.”

Cramer was referring to shares of apparel companies like Nike, Lululemon and Tapestry, all of which do business in China but have not seen their sales slow in a material way. Stocks of industrials with ties to the People’s Republic, like Boeing and Deere, an agricultural play that should be suffering from tariffs on U.S. crops, are also holding firm.

“I wonder if the action in Deere is signaling that maybe we’ll get some progress in these Chinese trade talks, or, at the very least, they’ll make a bunch of ag[ricultural] purchases as a show of good faith,” the “Mad Money” host wondered.

But the best ways to gauge trade talk progress in Cramer’s book are what he called “the three As”: American Express, Apple and aerospace.

If American Express is able to get a license to operate in China, that will signal that China is ready to embrace the U.S. financial sector, Cramer explained. If the Chinese government “starts making nice” with Apple, that would also be “very positive,” he said, much better than the news of iPhone price slashes in China that made waves Friday.

“But the most important show of good faith would be for China Airlines to place a gigantic order of planes with Boeing, an order that would reverberate throughout the entire aerospace complex, including Honeywell, United Technologies, and GE, … which is finally starting to [trade] like an aerospace and industrial stock again,” Cramer said.

For now, though, the “winners and losers in China” are starting to emerge, and there’s no denying that “the Chinese economy’s gotten pretty tricky here, especially for American companies,” he said.

“Frankly, China’s become unfathomable at the moment. We have no idea [what] their government’s doing, what it’s thinking,” Cramer said. “Maybe it’s darkest before the dawn, but I’d argue it’s ill-advised to predict the dawn until we’re further along into the night.”

Stocks sank in Friday’s trading session as worries about an economic slowdown in China took hold. For a timeline of the trade war and tariff exchanges between U.S. and Chinese trade authorities, click here.

With Disney expected to finalize its Fox deal shortly, Comcast focused on Sky and AT&T integrating Warner Media, the new group of giants has its hands full. And the companies that don’t have the scale to create a Netflix rival, as AT&T and Disney do, will increasingly focus on supplying Netflix and Amazon. Netflix and Amazon need that content because of the transformation of Disney and Warner Bros. from suppliers into rivals this year. And when it comes to picking and choosing, the traditional T

Megadeals will take a breather this year after 2018 marked massive consolidation. With Disney expected to finalize its Fox deal shortly, Comcast focused on Sky and AT&T integrating Warner Media, the new group of giants has its hands full.

Amazon, as it quickly scales its Hollywood presence, is likely to look at the remaining independent studios. But there’s no decisive need for the tech giants to buy a studio, in light of their ability to license content.

However, we could see exceptions in two key areas.

First, once Shari Redstone lands on a permanent CEO for CBS, she could push forward a merger of CBS and Viacom this year. And second, in the advertising world, look to ad agency holding companies to engage in deal making as their business gets squeezed by both consulting firms and programmatic ad platforms.

But when it comes to the smaller players media players, this year they’re likely to stick it out alone as they feel the pinch of their bigger rivals getting bigger. Discovery will double down on its niche services to lock in super fans of sports such as golf. And the companies that don’t have the scale to create a Netflix rival, as AT&T and Disney do, will increasingly focus on supplying Netflix and Amazon.

Netflix and Amazon need that content because of the transformation of Disney and Warner Bros. from suppliers into rivals this year. The corresponding pullback on licensing deals will bolster their own coffers and ability to produce more original content. Netflix will face real competition and consumers will be pushed to make tough choices.

This year, Netflix will face its first direct competition, from Disney+ and AT&T’s new service. Add to that the potential for a recession, and many consumers will start picking and choosing between the various streaming services. Will Disney+ cannibalize Netflix’s subscriber base thanks to cheaper pricing? Probably not, as the services will be quite different at first. But if the U.S. heads into recession, something has to give. Even if consumers swap the full TV bundle for a skinny offering, how many additional subscriptions can they maintain? Probably just a few. And that threat of overloaded consumers sticking with the one or two services that really provide value is what’s going to drive competition for content.

And when it comes to picking and choosing, the traditional TV bundle will lose more subscribers to skinny bundles. Expect traditional carriers such as Charter, Spectrum and Dish to suffer subscriber losses from blackouts. And blackouts are only going to become more prevalent. Cable companies can’t justify paying more, especially for second-tier channels. Content companies want to either secure higher rates, or convert viewers over to their own streaming services, which provide both higher profits and valuable data. HBO’s months-long blackout on Dish Networks is ongoing, and Spectrum subscribers are still unable to access Tribune channels after a New Year’s eve blackout.

As Apple falls on news of weak iPhone sales in China, there is still one more shoe that could drop in the country that would push consumers there even further away: The possible extradition from Canada of Meng Wanzhou, CFO of the country’s largest consumer hardware manufacturer, Huawei. The DOJ has until the end of January to file the paperwork under Canada’s extradition agreement with the U.S.Several media outlets have surfaced anecdotal reports of consumers in China already rejecting Apple pro

As Apple falls on news of weak iPhone sales in China, there is still one more shoe that could drop in the country that would push consumers there even further away: The possible extradition from Canada of Meng Wanzhou, CFO of the country’s largest consumer hardware manufacturer, Huawei.

The Justice Department has not yet filed detailed paperwork to request Meng, who is now out on bail in Vancouver, be extradited to the U.S. to stand trial on allegations of fraud over Iran sanctions. The DOJ has until the end of January to file the paperwork under Canada’s extradition agreement with the U.S.

Several media outlets have surfaced anecdotal reports of consumers in China already rejecting Apple products because of the dispute. But in an exclusive interview with CNBC on Wednesday, Apple CEO Tim Cook downplayed concerns that negative sentiments about American products might be playing a role in the weaker-than-expected sales in China.

“There are reports, sort of sporadic reports, about somebody talking about not buying our products because we’re American, maybe a little bit on social media, maybe a guy standing in front of a store or something,” Cook said. “My personal sense is that this is small. Keep in mind that China’s not monolithic. Just like America’s not monolithic. You have people with different views and different ideas. And so do I think anybody elected not to buy because of that? I’m sure some people did. But my sense is the much larger issue is the slowing of the economy and then this — the trade tension that’s further pressured.”

But Apple could be sustaining longer-term reputation and brand damage among Chinese consumers who may increasingly be associating its products with the big-picture legal actions undertaken by the U.S. government.

The U.S. Office of Personnel Management’s verified Twitter account posted sample letters for federal workers to use with landlords and creditors as they seek relief for payments. Bank of America has also offered some help for affected clients. “Our Client Assistance Program is available and designed to help clients experiencing financial hardship,” said spokesman Lawrence Grayson. Chase, the consumer banking arm of JPMorgan Chase & Co., said it would assist clients affected by the shutdown, enco

Some major banks are offering assistance to help customers who are affected by the government shutdown.

Congress and President Donald Trump have been at a standoff over funding for a border wall. In all, about 800,000 federal employees are expected to be furloughed or working without pay.

Affected workers are already grappling with incoming bills. The U.S. Office of Personnel Management’s verified Twitter account posted sample letters for federal workers to use with landlords and creditors as they seek relief for payments.

Several banks have stepped up to provide federal employees with help through existing consumer assistance programs.

Wells Fargo said it will consider reversing overdraft fees for customers whose income has been disrupted due to the shutdown. Further, mortgage, loan and credit consumers may qualify for forbearance or other payment assistance programs.

What exactly consumers can qualify for will depend on their individual circumstances, said Tom Goyda, a spokesman for Wells Fargo. Click here for more information on the bank’s program.

Bank of America has also offered some help for affected clients.

“Our Client Assistance Program is available and designed to help clients experiencing financial hardship,” said spokesman Lawrence Grayson.

The relief that consumers can receive will depend on the particulars of their situations, but may include fee waivers, loan modifications and more, he said. Consumers can call the bank’s assistance line at (844) 219-0690.

Chase, the consumer banking arm of JPMorgan Chase & Co., said it would assist clients affected by the shutdown, encouraging them to call its special care line at 1-888-356-0023.

Citi has also said that it’s offering assistance for clients facing hardship.

Click here for a list of federal agencies and their contingency plans amid the shutdown.

Here’s how federal workers can shore up their finances and get through any lean times ahead.

U.S. consumers will see labels on food products that contain genetically modified ingredients as early as 2020, federal officials said Thursday. The fight over whether or not to label foods with genetically modified ingredients, also called genetically engineered foods and GMOs, has raged for years. Advocates say consumers should know how their food is made, and opponents worry consumers will interpret labels on bioengineered foods as a warning on foods many agree are safe. After scanning the co

U.S. consumers will see labels on food products that contain genetically modified ingredients as early as 2020, federal officials said Thursday.

The USDA on Thursday released the first national disclosure requirements for foods that have been altered in a way that doesn’t occur naturally.

The fight over whether or not to label foods with genetically modified ingredients, also called genetically engineered foods and GMOs, has raged for years. Advocates say consumers should know how their food is made, and opponents worry consumers will interpret labels on bioengineered foods as a warning on foods many agree are safe.

The guidelines, which use the term “bioengineered” instead of the more commonly used “genetically modified,” allow disclosure of bioengineered ingredients in several formats: in text, a symbol, a digital link printed on packaging or text message.

Companies can use a QR code with a statement like: “Scan here for more food information.” After scanning the code, consumers will be brought to a website where genetically modified foods will be disclosed. If a company provides a digital link disclosure, it must also provide a telephone number consumers can call for information. Critics say companies that use the QR code should be required to include the word “bioengineered” in their statement.

Advocates of multiple labeling options say it will be easier for companies to comply with the guidelines, but opponents fear it will confuse consumers or restrict access for those without smartphones.

Andrew Kimbrell, director of the Center for Food Safety, called digital labeling “irresponsible.” The group sued the Trump administration in July to release documents related to the guidelines.

“That that is considered to be adequate labeling under these regulations is, I think, anti-consumer, discriminatory and illegal,” Kimbrell said. “And it’s also a terrible precedent. What if they start doing that with nutrition labeling?”

Under the guidelines, products that have been processed to the point where genetically modified DNA can’t be detected, like refined beet sugar, high fructose corn syrup and oils, won’t have to be labeled.

The guidelines also make accommodations for smaller companies, including a later implementation date and different labeling. Small food manufacturers also have additional labeling options that include disclosing genetically modified ingredients on the label with a telephone number or website address.

Ken Harris, managing partner at Cadent Consulting Group, said national guidelines will help food manufacturers make choices about whether or not they want to keep genetically modified ingredients in their products by defining what these organisms are. Having guidelines are helpful, he said, because without them manufacturers are “chasing a moving target.”

The USDA created the guidelines after Congress passed a law in 2016 to include a disclosure of bioengineered food in the Agricultural Marketing Act of 1929. The mandatory compliance date is Jan. 1, 2022, but the disclosures could start as early as Jan. 1, 2020, the USDA said.

Correction: This story was revised to correct that the USDA announcement was made on Thursday.